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BILL C-86 Proposed Amendments to IP Legislation

PROPOSED AMENDMENTS TO BILL C-86 OVERVIEW

By Erin Schachter, Lawyer, Therrien
Couture

December 6 2018

On the 29th of October 2018, the
Government of Canada introduced a bill entitled, A second Act to implement certain provisions of the
budget tabled in Parliament on February 27, 2018, and other
measures (Bill C-86). Bill C-86
is a voluminous bill, which contains a division devoted to intellectual
property strategy. This division proposes amendments to a vast number of laws
including: the Patent Act, the Trade-marks Act,
the Copyright Act, the Bankruptcy and Insolvency Act,
the Companies Creditors Arrangement Act, and the Access
to Information Act and Privacy Act,among others.

In this article, we provide
a non-exhaustive overview of the proposed changes contained in each of the
subdivisions of the IP section of Bill C-86 along with some general context of
how these changes fit into the government’s overall goal of reforming IP in
Canada.

Subdivision A – The Patent
Act

There
are several proposed changes to the Patent Act, which seek to
ensure Canada’s compliance with its international obligations as well as
codifying certain rights established by case law in Canadian courts.

Standard-essential Patents

Standard-essential
patents (SEP) are patents that protect an invention that is essential for a
given technology (ex: WiFi or Bluetooth). Definitions of SEP’s
are known to vary across jurisdictions, and Bill C-86 does not propose a
definition. Bill C-86 does establish that the Governor in Council is granted
powers to regulate SEP’s and establish definitions and licensing
commitments. Under the bill, licensing commitments made by a
patentee, in reference to an SEP, will bind any subsequent patentee.

Prior User Rights

If the
proposal is accepted, prior use rights contained in the Patent
Act would be broadened to include acts, in good faith, that would
otherwise constitute an infringement, or serious and effective preparations to
commit the act, if the use was before the earliest filing and the third party
did not commit the act only because they obtained information about the
restriction from the patent applicant. Third parties, who commit this same act
on or after the claim date, would benefit from an exemption.

ExperimentationAn exemption from infringement would be introduced if the alleged act
was committed for the purpose of experimentation. The Bill grants the Governor
in Council the authority to regulate what would constitute an experiment and
criteria for establishing whether the act was committed for this purpose or
not.

Written DemandsWritten demand letters in reference to any patent infringement sent to
alleged infringers in Canada would be subject to minimum requirements, to be
determined by the Governor in Council. This framework would apply whether the
demand letter is issued in relation to a Canadian patent or elsewhere. Bill
C-86 also provides that the violation of this provision would entitle the
Federal court to grant any relief it considers appropriate including an
injunction and punitive damages.

Patent Prosecution History

Bill
C-86 proposes an amendment to the communications that may be admitted into
evidence to counter claims made by a patent applicant during prosecution of a
patent application. This amendment would allow any prior statements made by a
patent applicant, including patent prosecution history, to be admitted into
evidence for certain purposes.

B- Trade-marks

Modifications to the Trade-marks Act would
address concerns both domestically and abroad in relation to trade-mark trolls.
This subdivision of the Bill provides additional powers to the registrar and
also includes many provisions that would modernize the overall conduct of
proceedings. The Bill also proposes amendments to clean up inconsistencies in
the Combating Counterfeit Products Act as well as the Economic
Action Plan 2014 Act.

Bad Faith Opposition and Use

The Bill proposes a “Bad Faith” opposition that
could be invoked to oppose or invalidate a registration. Also, in the first
three years following the registration of the trade-mark, the owner thereof,
must prove that they use the trade-mark or justify the absence of use to obtain
relief for infringement. This proposal reacts to the concern over trade-mark
trolls who register a trade-mark and hold the mark hostage, without a
legitimate purpose to obtain a settlement from the true user of the trade-mark.

Public authority prohibition

The Bill would eliminate
the prohibition that prevented a person from using a mark that is identical or
similar to that of a public authority, if the public authority has ceased to
exist, or is not a public authority.

Evidence during
an Appeal

In the event that a
registrant appeals the decision of the registrar, Bill C-86 provides that new
evidence to support the application for a trade-mark can only be filed with
permission from the Federal Court. This new requirement may substantially alter
how registrants will approach initial applications before the registrar,
knowing that additional evidence may not be accepted subsequently.

Enable Registrar to grant orders

The
proposed amendment imbues the registrar with the authority to award costs, to
grant confidentiality orders, case management in certain proceedings.

C- Copyright Act

Bill C-86 proposes a modification to the Copyright
Act that addresses concerns from the public in relation to aggressive
demand letters sent through the notice and notice system. Negative public
feedback has highlighted the risk of Internet Service Providers (ISP)
forwarding letters from right holders to alleged infringers. In some cases,
these letters invoke fear and use bullying tactics to extract payment from the
accused infringers. In other cases, the letters contained demands
for personal information, settlement demands, threats of lawsuits, and threats
that the amount requested would increase if not paid.

To rectify this situation, Bill C-86 proposes prohibiting the inclusion of
settlement offers, payment demands, or request for personal information in the
letter, or hyperlinks requesting same. Moreover, ISP’s duties under the Copyright
Act would only be engaged for an infringement notice that respects
these restrictions. This would provide ISP’s with some discretion in forwarding
letters that do not respect the prescribed form.

Other Sections

The following subdivisions provide for the creation
of new legislation and the modification of several Acts that lead to greater
clarity, cohesion and an overall modernization of IP rights and obligations in
Canada.

D- College of Patent Agents and Trade-mark Agents
Act

Bill C-86 proposes a new
Act that would establish a regulatory body to create standards for patent and
trade-mark agents, including standards for granting licences to govern
practices.

E - Amendments relating to the preservation of
usage rightsThe proposed amendments to the Bankruptcy
and Insolvency Act and the Companies’ Creditors Arrangement
Act would protect IP users when these rights are sold in the context
of insolvency proceedings. The agreement granting the user rights must be in
effect and the user must continue to comply with the agreement. If so, then the
rights of the IP user will be protected even when the IP rights are sold, or
the rights are disposed of.

F-Privileged Information

Access to
Information Act and Privacy Act would be amended by
permitting the head of a government institution to refuse to disclose
information provided the information is subject to privilege under the Trade-marks
Act or in the Patent Act.

G- National Research Council
Act

The National Research Council Act would
be amended to clarify that this entity has the authority to dispose of all the
intellection property rights that it holds, including receiving royalties, fees
and payment for, any IP right and future rights. This section also clarifies
that any invention made by a public servant and patents that may follow, are
vested in the Council, in relation to the Public Servants Inventions
Act.

H- Copyright Act (Copyright
Board Reform)

The last subdivision of the IP chapter of Bill C-86
amends the Copyright Act in reference to the framework in
place that governs the Copyright Board. These provisions clean up and replace
much of the outdated language and restructure the previous legislation.

The aim of this section is to improve the timeliness and clarity of proceedings
and the overall decision-making process by the Board. This includes
establishing decision-making criteria, creating new timelines to minimize
delays, implementing case management proceedings similar to civil courts that
would allow the case manager to make any order.

Finally, the Board is imbued with the right to fix royalty and levy rights that
are fair taking into consideration: “what would have been agreed upon between a
willing buyer and a willing seller acting in a competitive market […]”. The
Board may take into consideration any criteria it considers to be relevant.

Conclusion

Bill C-86 contains numerous proposed amendments
dealing with rights and the overall structure of IP in Canada. Many of the
amendments align Canadian IP more closely with its international obligations
and seek to clarify and modernize elements of Canadian IP legislation. As Bill
C-86 makes its way through the twist and turns of becoming law, we will
continue to write on the proposed modifications and their possible
impact.

Legal.IT

If you want to know more about
technologies, we invite you to attend to the 13th edition of Legal.IT, thelargest
conference in Canada that focuses on the impact of IT and its potential in the
field of law.This event, organized by the IT Committee of the
Young Bar of Montreal, will take place on March 22nd at Marché Bonsecours and
will be preceded with an opening cocktail: Cocktail Branché, March 21st, at
6pm.

Since 2009, every session of the Legal.IT
Conference has been an approved activity of the Barreau du Québec’s Mandatory
Continuing Education Program.